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Case Laws
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AI Text Quick Glance by AI Headnote
AI TextQuick Glance (AI)Headnote
Retention allowance claims during CIRP require legal proof; payment slip and management endorsement were insufficient, while June salary was allowed.
Retention allowance and salary claims during CIRP require legal entitlement and supporting evidence; a payment slip and a managing director's endorsement were found insufficient to establish enforceable liability. Salary for June 2017 was directed to be paid subject to the stated conditions, while the appeal against the NCLAT order was dismissed and pending applications were disposed of.
AI TextQuick Glance (AI)Headnote
SEZ service tax refund cannot be denied for procedural lapses, and delayed refund interest accrues after the statutory period.
Service tax refund for services used in authorised operations in a Special Economic Zone could not be denied merely because the assessee had not obtained prior approval of the specified service list or filed Form A-1, where the Department did not dispute actual receipt of the services for authorised SEZ operations. The substantive exemption under the Special Economic Zone Act prevailed over procedural conditions in the notification, and the refund was therefore admissible. Interest on the delayed refund was also payable under the statutory refund interest provision once three months had expired from receipt of the refund application, and it was not postponed until the refund or appellate order was issued.
AI TextQuick Glance (AI)Headnote
Exempt electrical energy supplies under rooftop solar arrangements do not require GST registration, and advance rulings bind only on unchanged facts.
Exclusive supply of wholly exempt electrical energy through a rooftop solar arrangement did not attract GST registration, because electrical energy was treated as goods and remained exempt under Notification No. 02/2017-Central Tax (Rate). The applicant was therefore not liable to pay GST or obtain registration for that supply. An advance ruling, however, has only a limited statutory effect: it binds the applicant and the jurisdictional officers only so long as the material law, facts and circumstances remain unchanged. It does not operate as a general precedent for unrelated parties or altered transactions.
AI TextQuick Glance (AI)Headnote
RBI penalty, CSR spend and new tax claims: ITAT explains disallowance, deduction limits and appellate powers
Penalty paid for breach of RBI lending directions was treated as a business outgo and not hit by Explanation 2 to section 37(1) because the violation was not founded on an offence. CSR expenditure incurred after the amendment to section 37(1) was not allowable as business deduction, and the assessee's goodwill argument could not override the statutory bar. A new claim relating to recovery from bad debts written off by rural branches could be raised before the appellate authority, and taxability of income from sale of Priority Sector Lending Certificates could also be examined on the existing record; both matters were remitted for fresh adjudication after hearing the assessee.
AI TextQuick Glance (AI)Headnote
Accumulation relief under trust law upheld despite minor Form No. 10 variations and permitted bank investment
A registered trust was not to be denied accumulation relief merely because Form No. 10 used minor variations in describing the purpose, where the stated objects of repair, renovation and maintenance remained within the trust's objects. Investment of the accumulated funds in fixed deposits with a scheduled bank was treated as a permissible mode under section 11(5), supporting entitlement under section 11(2). Only the exact dates of certain investments were left for verification by the AO, with relief to follow accordingly.
AI TextQuick Glance (AI)Headnote
Service tax appeal dismissed as time-barred leaves original adjudication open to challenge and remand for fresh consideration.
Where a statutory service tax appeal is rejected only as time-barred and not on merits, the original order does not merge with the appellate dismissal and remains open to challenge. The Karnataka HC also noted that similar matters required examination of whether the activity fell within taxable service under Section 65B(44) of the Finance Act, 1994, whether any negative-list or exemption applied, including Notification No. 25/2012-ST, and whether liability arose under Rule 2(1)(d) of the Service Tax Rules, 1994. The order-in-original was set aside and the matter remitted to the stage of reply to the show-cause notice for reconsideration.
AI TextQuick Glance (AI)Headnote
GST demand beyond the show-cause notice was not sustained, with liberty to seek statutory rectification before the Proper Officer.
A demand under GST cannot validly travel beyond the scope of the show-cause notice, and a confirmed liability including CGST and SGST/TGST that was not proposed in the notice was treated as inconsistent with the statutory notice requirement. The impugned demand was therefore not sustained as framed. The petitioner was nevertheless given liberty to seek rectification before the Proper Officer by filing the prescribed application under the rectification provision, with consideration in accordance with law after affording a personal hearing.
AI TextQuick Glance (AI)Headnote
Protective addition, section 54F exemption, and TDS credit require factual verification before tax liability is finalised.
Protective assessment can be converted into a substantive addition only when the record clearly identifies the person liable to tax, supported by material on ownership and taxability; absent a categorical finding, the conversion is not sustainable and requires reconsideration. Exemption under section 54F depends on satisfaction of the statutory conditions and adequate proof of the transfer and investment, so the claim was remitted for fresh adjudication. TDS credit cannot be denied merely for PAN mismatch without factual verification of the income-tax nexus, and the denial was set aside for reconsideration by the Assessing Officer.
AI TextQuick Glance (AI)Headnote
Section 68 loan credit explanation fails where lender funds are unexplained; addition remanded for fresh enquiry.
Deletion of the section 68 addition in respect of an unsecured loan from a holding company was held unsustainable where the assessee produced basic lender documents but did not explain the source and nature of the credits appearing in the lender's bank account immediately before the transfer. For the relevant assessment year, the first proviso to section 68 required a satisfactory explanation of the nature and source of the credited sum, and the appellate authority's reliance on the absence of independent enquiry was insufficient. The record also indicated that the further enquiry contemplated by section 250 was not carried out before reversing the addition. The matter was remanded for fresh consideration after necessary enquiry.
AI TextQuick Glance (AI)Headnote
Natural justice in assessment: non-disclosure of benchmark yield basis invalidated the orders and required fresh hearing.
Assessment orders were set aside where the assessee was not informed of the source and basis for fixing the 94.5% standard yield benchmark. The Court found that the record did not show any response to the assessee's request for the material relied on, and the orders did not disclose that such material had been furnished. This amounted to a denial of an effective opportunity to object and breached natural justice. The matters were remanded to the Assessing Authority to disclose the source and details of the material used for the benchmark and to hear the assessee's objections before passing fresh orders.
AI TextQuick Glance (AI)Headnote
Provisional attachment of bank account in tax recovery dispute eased after refund and retention of pre-deposit pending further sale proceeds.
Provisional attachment of a bank account was linked to recovery of tax demand arising from an assessment order, but the sale transaction had collapsed because of delay caused by the tax authorities. The matter was disposed of after recording that the amount due had been refunded, subject to retention of the pre-deposit, and that the respondents would wait for any further deposit if additional sale proceeds were later received.
AI TextQuick Glance (AI)Headnote
Transitional input tax credit under GST cannot be denied merely because the underlying transaction arose before the appointed day.
Transitional input tax credit under Section 140 of the CGST Act, 2017 cannot be denied merely because the underlying inputs or input services relate to transactions before the appointed day. The provision must be read with both sub-sections (1) and (5): sub-section (1) covers CENVAT credit carried forward from the pre-GST return period, while sub-section (5) separately permits credit of eligible duties and taxes on inputs or input services received on or after the appointed day, subject to prescribed conditions. An overly restrictive reading that limits transition only to post-appointed-day transactions is inconsistent with the statutory scheme, and eligible transitional credit remains admissible.
AI TextQuick Glance (AI)Headnote
Reassessment under sections 147 and 148 remains available where section 153C conditions are not met, if reopening procedure is followed.
Where the jurisdictional requirements for section 153C are not satisfied, recourse to reassessment under sections 147 and 148 is not barred by the non obstante clause in section 153C. The Tribunal noted that information from the Investigation Wing could validly support reopening when the Assessing Officer followed the prescribed reopening procedure. The objection that proceedings ought to have been taken only under section 153C was rejected, and reassessment jurisdiction under sections 147 and 148 was upheld.
AI TextQuick Glance (AI)Headnote
Delayed Form 10B filing remains sufficient compliance when the audit report reaches assessment records before return processing.
Exemption under sections 11 and 12 requires audit and furnishing of Form 10B under section 12A(1)(b). Delayed filing of the prescribed audit report is treated as a procedural defect where the correct Form 10B is available to the Assessing Officer before return processing under section 143(1), since this fulfils the statutory purpose of verifying eligibility. Filing the report before processing therefore constitutes sufficient compliance and does not justify denial of exemption. The availability of condonation powers under section 119(2)(b) does not prevent appellate relief on the same facts.
AI TextQuick Glance (AI)Headnote
Agricultural Produce Marketing Committee exemption upheld; wrong PAN classification could not defeat statutory relief and reassessment additions fell away.
Bona fide delay caused by incorrect PAN classification, difficulty in filing the appropriate return form, and the need for professional advice was treated as sufficient cause, so the 84-day delay in filing appeals was condoned. The tribunal also accepted that an Agricultural Produce Marketing Committee was entitled to exemption of its income under section 10(26AAB); a wrong PAN status as a trust did not change the assessee's statutory character or justify taxing exempt receipts. Once the exemption applied, the reassessment additions could not survive, and the income was directed to be assessed at nil.
AI TextQuick Glance (AI)Headnote
Charitable registration and 80G approval cannot be denied merely because hospital operations have not fully commenced.
Charitable registration cannot be refused merely because a hospital project has not yet fully commenced, where the trust's objects are charitable and fall within medical relief under section 2(15). At the registration stage, the enquiry is limited to whether the objects are charitable and whether the proposed activities are genuine and aligned with those objects. If no adverse finding is recorded that the objects are commercial or otherwise non-charitable, non-commencement of full operations alone does not justify rejection. On that basis, refusal of registration under section 12AB(1)(b) was held unsustainable, and consequential approval under section 80G was also to follow.
AI TextQuick Glance (AI)Headnote
Amalgamation and tax deduction limits: transfer of undertaking barred 80IA relief, and business reorganisation blocked 80JJAA deduction.
Section 80IA relief was treated as unavailable to an amalgamated company where the undertaking stood transferred under a scheme of amalgamation after 31.03.2007, because section 80IA(12A), read with the Finance Act, 2007 notes and Circular No. 3/2008, indicates that the benefit does not pass to the transferee in such cases. Section 80JJAA deduction was also treated as unavailable where the assessee's business resulted from amalgamation and business reorganisation, because the provision bars deduction when a business is acquired by transfer or formed by reconstruction. On both issues, the statutory restrictions prevailed over the amalgamation scheme and the deductions were disallowed.
AI TextQuick Glance (AI)Headnote
Estimation-based additions fail when books remain unrejected and recorded transactions are selectively disallowed without statutory grounds.
Estimation-based additions for wages, interest and sundry creditors require prior rejection of the books of account on statutory grounds under section 145(3). Where recorded books, purchases, sales and transactions remain undisturbed, the Assessing Officer cannot make selective ad hoc additions from entries already reflected in those books. Best judgment assessment under section 144 becomes relevant only after the accounts are found incorrect, incomplete or unreliable and the books are rejected. Accordingly, estimation without rejection of books cannot sustain such additions, which must be deleted.
AI TextQuick Glance (AI)Headnote
Free warranty replacements and debit-note repair recoveries did not justify excise duty demand on the facts stated.
Free warranty replacement parts cleared under warranty were treated as not giving rise to separate excise duty demand because warranty charges had already been factored into duty on the final product. Debit-note recoveries for repair charges relating to damaged inputs in transit also could not sustain duty demand, as the record did not show that the damaged inputs were not used in production and the recoveries reflected repair charges rather than excisable consideration. On both issues, the excise demand and consequential order were held unsustainable.
AI TextQuick Glance (AI)Headnote
Statutory appellate remedy preserved with delay condonation liberty and interim protection against coercive steps
A writ petition was disposed of by permitting the petitioner to pursue the statutory appellate remedy, together with an application for condonation of delay. The Court also directed that no coercive steps be taken for the limited period allowed to file the appeal, preserving the petitioner's opportunity to seek appellate redress through the prescribed statutory route.

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1995 (9) TMI 94 - AT - Income Tax

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Validity of reassessment upheld based on loan transaction doubts; ITAT affirms CIT (A) decision.
The ITAT upheld the validity of the reassessment proceedings initiated by the Assessing Officer under section 147(b) based on information received from ... Summary

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Acts Income Tax